Ms Alite Billet And Coil Corporation Through Its Proprietor Shri Raj Kumar Mishra vs. The State Of Jharkhand

Held

The Court held that the summary of show cause notices (DRC-01), show cause notices (DRC-02), summary of orders (DRC-07), adjudication orders, penalty orders, and all subsequent orders issued by the department in all the writ applications were bad in law. This was primarily because these orders were issued without the mandatory issuance of any show cause notice and without affording the opportunity of a personal hearing, which is a mandatory requirement under the Act. The Court found that no detailed orders were passed in terms of the provisions of the Act. The Court noted that the respondents failed to produce any documents to demonstrate compliance with the procedural requirements. Consequently, the Court quashed and set aside the various DRC-01, DRC-02, DRC-07, DRC-13, adjudication orders, and penalty orders listed in the judgment. All matters were remitted back to the concerned respondents to pass fresh orders in accordance with the law and specific provisions of the JGST Act, 2017, after strictly following the principles of natural justice. The Court explicitly left open the question of whether an assessee can invoke jurisdiction under Section 108 of the JGST Act.

Facts

Multiple petitioners, including M/s Samridhi Enterprises, M/s Raj Keshri Ispat & Energy Pvt. Ltd., and others, filed writ petitions before the Jharkhand High Court challenging orders passed by various State Tax authorities under the Jharkhand Goods and Services Tax (JGST) Act, 2017. The core of the dispute revolved around the issuance of demand notices and subsequent orders for tax, interest, and penalty. The petitioners contended that these actions were taken without proper procedure, specifically without issuing show cause notices and providing an opportunity for a hearing. The tax periods involved varied across the petitions, with some orders dating back to 2018 and 2020, and penalty orders as late as 2022. The authorities issued Form GST DRC-01, DRC-02, DRC-07, and DRC-13, and in some cases, adjudication orders and penalty orders.

Key Issues

1. Whether the summary of show cause notices (DRC-01), show cause notices (DRC-02), summary of orders (DRC-07), adjudication orders, penalty orders, and subsequent orders issued by the respondents are bad in law for non-compliance with the principles of natural justice and statutory provisions of the JGST Act, 2017? 2. Whether the demand of tax, interest, and penalty confirmed by the respondents is valid without proper inquiry and without issuing mandatory show cause notices under Section 73/74 of the JGST Act, 2017, along with a summary show cause notice under Rule 142(1)? Petitioner's Arguments: The petitioners argued that no show cause notice was issued, and no relied-upon materials were provided. They contended that the DRC-01 notices were vague and lacked details, violating the principles of natural justice. Furthermore, they asserted that no detailed orders were passed, and DRC-07 notices were issued in violation of Rule 142(5) of the JGST Rules. They also claimed that no opportunity of hearing was granted, which is a violation of Sections 75(4) and 75(5) of the Act. They relied on the case of M/s. Godavari Commodities Ltd. Vs. The State of Jharkhand &Ors. Revenue's Arguments: The respondents failed to produce any documents to satisfy the Court that proper procedure was followed in passing the orders. They could not bring on record any document or 'chit of paper' showing that the adjudication orders were served upon the petitioners or that an opportunity of hearing was granted.